<p>Grassland transfer market in China holds significant potential for optimizing land use; however, the increasing prevalence of short-term transfer contracts presents new challenges for grassland ecology. While existing literature largely focuses on the economic benefits of grassland transfers, it fails to fully address the trade-offs between economic gains and ecological sustainability. This study utilizes econometric analysis and field survey data from herding households in the Qinghai-Tibetan Plateau to examine the dual economic and ecological impacts of short-term grassland transfer contracts. The results indicate that short-term contracts improve economic efficiency by reallocating grassland to more productive households, thereby increasing household income. However, they also exacerbate grazing pressure, leading to severe ecological degradation. Further analysis reveals that these contracts strengthen the economic dependence of herders on grassland resources, masking the ecological cost of overgrazing and fostering reliance on rental income derived from overuse. The findings underscore the tension between immediate economic benefits and long-term ecological sustainability, highlighting the urgent need for policies that balance these competing interests. This study provides valuable insights for policymakers addressing the complex challenges of grassland resource management and environmental conservation.</p>